''I'm not, senator,'' Greenspan replied when asked by Sen. Charles Schu-mer, D-N.Y., at a hearing whether he was concerned about a potential slide back into government deficit spending.

On another economic issue, Greenspan said that a recent increase in job layoffs -- new claims for state unemployment insurance have risen to more than 400,000 a week -- will affect consumers' confidence and willingness to keep buying.

However, he added, there hasn't been ''any real serious deterioration'' in spending.

During questioning, Schumer and several other Democratic senators prodded the central bank chief to express concern over the big 10-year tax cut, given the state of the economy and the low savings rate of Americans. The tax cut, recently enacted by Congress and signed into law by President Bush, is the centerpiece of Bush's economic program.

Greenspan lent crucial support to Bush's tax-cut proposal in January, and has subsequently stated his belief that reducing taxes is a preferred use for ballooning budget surpluses.

In his testimony before the Banking Committee, Greenspan said the sagging economy has brought more problem loans and made bankers fairly tightfisted. He cited weaknesses in retailing, manufacturing, health care, telecommunications and among California utilities, strapped by high wholesale electricity prices they are barred from passing on to consumers.

Bank regulators ''need to be more sensitive to problems at individual banks, both currently and in the months ahead,'' Greenspan said at the hearing on the state of the nation's financial system.

''We are fortunate that our banking system entered this period of weak economic performance in a strong position,'' he said.

Greenspan did not discuss the future course of interest-rate policy.

To ward off recession, the Federal Reserve has slashed interest rates five times this year. Many analysts predict policy-makers will make a sixth cut at the end of their two-day meeting June 27.

Greenspan's remarks come as Americans' personal debt is at an all-time high. Mortgage delinquencies and write-offs by credit card companies are rising, and personal bankruptcy filings could hit a record this year.

During questioning, Greenspan suggested that the problem of Americans' low savings rate -- which stood at a negative 0.7 percent of after-tax income in April -- is tempered by the ''extraordinary degree of productivity from our savings.''

One of his fellow Fed governors, Edward Gramlich, said in a speech Wednesday that personal saving is vital for households to maintain their standard of living, and more work should be done to help consumers -- especially low- and moderate-income families -- improve their financial situation.